Correlation Between Social Life and Agilysys

Can any of the company-specific risk be diversified away by investing in both Social Life and Agilysys at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Social Life and Agilysys into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Social Life Network and Agilysys, you can compare the effects of market volatilities on Social Life and Agilysys and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Social Life with a short position of Agilysys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Social Life and Agilysys.

Diversification Opportunities for Social Life and Agilysys

-0.2

Correlation Coefficient

Social Life  Agilysys

Good diversification

The 3 months correlation between Social and Agilysys is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Social Life Network and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys and Social Life is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Social Life Network are associated (or correlated) with Agilysys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilysys has no effect on the direction of Social Life i.e., Social Life and Agilysys go up and down completely randomly.

Pair Corralation between Social Life and Agilysys

Given the investment horizon of 90 days Social Life Network is expected to under-perform the Agilysys. In addition to that, Social Life is 6.78 times more volatile than Agilysys. It trades about -0.02 of its total potential returns per unit of risk. Agilysys is currently generating about 0.5 per unit of volatility. If you would invest  10,004  in Agilysys on September 1, 2024 and sell it today you would earn a total of  3,426  from holding Agilysys or generate 34.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Social Life Network  vs.  Agilysys

Social Life Network

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Social Life Network are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady essential indicators, Social Life reported solid returns over the last few months and may actually be approaching a breakup point.

Agilysys

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Agilysys are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Agilysys unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Social Life and Agilysys

The main advantage of trading using opposite Social Life and Agilysys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Social Life position performs unexpectedly, Agilysys can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Agilysys will offset losses from the drop in Agilysys' long position.

The idea behind Social Life Network and Agilysys pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.